Which is NOT a tool that the Federal Reserve can use to influence AD?
A) open-market operations
B) lending to banks and other financial institutions
C) changes in reserve requirements and the interest rate paid on reserves
D) printing money

Question

Quizplus · Accepted Answer

While the Federal Reserve can use open-market operations, lending to banks, changes in reserve requirements and interest rates to influence aggregate demand, it cannot directly print money. The Fed can create money indirectly by purchasing government securities or other financial assets, but it does not physically print currency.

Which Is NOT a Tool That the Federal Reserve Can